Preliminary North America Class 8 net order data released by the two commercial vehicle organizations that track information both show a sharp decline in Class 8 orders for May.
FTR reports preliminary Class 8 orders for May scraped the bottom of the order cycle, coming it a lowly 10,400 units, or 29% below the slow April activity.
This is the lowest volume for Class 8 orders since July 2016 and the weakest month of May since 2009, reflecting a minus 71% year-over-year comparison. Class 8 orders for the past 12 months now total 360,000 units.
ACT Research showed the OEM industry booked 10,800 units in May, dropping 27% from April, but down a more significant 70% from year-ago May.
FTR’s Don Ake, vice president of commercial vehicles said May 2019 is basically the final period for ordering trucks to be built in 2019 and the low numbers indicate that fleets are simply trying to find any scarce build slots left for the year. Backlogs should fall to the 220,000 range, just where they were a year ago when the fervent ordering for 2019 began.
“May’s low orders were consistent with it being the last month in this year’s cycle. The 2019 order pattern was pulled ahead by three months, so May’s orders are similar to what you normally would see in August,” he said. “Ordering for 2020 is expected to begin in June, with several OEMs expected to start taking orders for next year.”
OEM build rates remain at robust levels, Ake said.
“The economy and freight growth are expected to ease throughout the year, applying some downward pressure on the truck market in the second half. Orders for the next couple of months should be a good indicator of fleet confidence about 2020.”
“Fraying freight market and rate conditions along with a still-large Class 8 order backlog contributed to the worst NA Class 8 net order performance since July 2016,” said Kenny Vieth, ACT’s president and senior analyst. “May saw NA Class 8 orders fall below the 15,900 units averaged through the year’s first trimester, and year-to-date Class 8 net orders have contracted 64% compared to the first five months of 2018.”
For more information on FTR visit ftrintel.com.
For more information on ACT Research, visit actresearch.net.